20 April 2012

Zambia: Scaw in Market Setback

SCAW Limited, a Kitwe-based steel and iron manufacturing company, is struggling to secure market for its mill balls because the mining firms prefer to import the same products.

Company managing director Rameshwar Gupta said most of the mining firms import the mill balls from South Africa leaving the products locally manufactured by his company.

He said despite SCAW having remained committed to producing high-quality mill balls as demonstrated by the International Standards Organisation (ISO) rating which the company was expected to secure in the next few months, there was still no local market for its products.

Mr Gupta expressed this concern on Wednesday, when Mines Deputy Minister Richard Musukwa toured the company.

"The reasons all buyers run to South Africa for the procurement of mill balls, is because of the duty free import they get which makes them not to pay any duty whereas us, pay full duty for bringing in spare parts making maintenance costs extremely high," he said.

Mr Gupta said there was need for Government to level the playing field so that there is no huge discrepancy between the costs for importation and that of locally manufactured mill balls.

He further complained that mine firms had not be fair with local manufacturing firms including SCAW as they subject them to urgent requirements when placing orders of products for their operations.

"They don't understand that production of a product is not a one-day thing as it requires a week or two to do so but when you tell them to wait they rush to place orders outside the country," he said.

Mr Gupta said it was in this vain that SCAW had now devised a mechanism where mine firms were being requested to submit a plan of their product needs for a period of not less than five years so as to help the company avoid producing unwanted items that would make it incur operations losses.

And Mr Musukwa said the importation of mill balls by mine companies was a big concern for Government because this was having a negative toll on the country's economy.

"We were saddened to hear that mine companies are buying mill balls from South Africa when our local company SCAW is manufacturing the same products. As Government we believe SCAW is a company that survives on mining and such deserves all the support from the mines," Mr Musukwa said.

He said Government would do everything within its means to ensure that a deliberate plan of having Zambian products such as mill balls got market from the mines.

Mr Musukwa said if the Zambian economy was to attain meaningful growth, there was need to create capacity for the local manufacturing industries such as SCAW, which currently had a workforce of 500.

Meanwhile, Mr Gupta has said the company has injected a further US$3 million investment in the construction of a forging plant for the manufacturing of the dynamic steel balls as it seeks to reposition itself in meeting any demand by the mines.

Scaw was now expanding its operations to increase manufacturing of mill balls currently being imported from South Africa.

He said construction of the plant has reached an advanced stage and was expected to be completed by June this year.

Once completed, the project would earn the country $20, 000 annually in revenue.

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